- Honda will reportedly manufacture the next-generation Civic in Indiana. That’s a change of plans for the company, which had been planning to manufacture the vehicle in Mexico. The move comes following Donald Trump’s levying of 25% tariffs on goods from Mexico and Canada.
At least one automaker is betting President Trump’s tariffs won’t be a short-term event—and is increasing its manufacturing capacity in the U.S. in hopes of sustaining or increasing sales.
Honda has reportedly decided to manufacture the next-generation Honda Civic in Indiana, rather than Guanajuato, Mexico. Production will begin in May 2028, a six-month delay from the original plans. The move comes as 25% tariffs on products from Mexico and Canada went into effect Tuesday, a decision that is expected to raise the price consumers pay for vehicles made in Mexico by $4,000 or more.
Those increases come after a 20% average rise in sticker prices over the past five years.
Honda, initially, had eyed Mexico as the home of its production facility to keep costs low. Roughly 80% of the cars Honda makes in Mexico are sent to the U.S.
Honda declined to comment about the report.
“Honda has made no such announcement and will not comment on this report,” a company spokesperson told Fortune. “The Honda Civic has been made in our Indiana auto plant since the facility opened in 2008 based on our long-standing approach to build products close to the customer. We have the flexibility to produce products in each region based on customer needs and market conditions.”
The Civic is a popular car for U.S. drivers. Car and Driverreports it was the 10th bestselling vehicle in the U.S. in 2024, with shoppers buying more than 242,000 vehicles—a 21% increase over the prior year. The Civic is the bestselling compact car in the country.
Honda would be the first automaker to change its plans based on Trump’s tariffs, but may not be the last. Other manufacturers could expand production at existing U.S. facilities. BMW’s largest U.S. plant is in South Carolina; Toyota’s largest factory outside of Japan is located in Kentucky, specializing in the Camry.
Moving production facilities to the U.S. won’t necessarily prevent price increases on vehicles, however. While Honda and other automakers might avoid tariff charges, labor costs will be notably higher in American cities, which will be passed along to consumers. How much that could bump up costs is still unclear.
